Corporación América Airports (CAAP) Q3 2024 earnings summary

Executive summary

• Geographic diversification and a diversified airport portfolio helped offset weaker results in Argentina, where macroeconomic challenges led to a 4.2% revenue decline and a 15.9% drop in adjusted EBITDA ex IFRIC 12.

• Strong performances in Uruguay, Brazil, and Italy, supported by international traffic and commercial initiatives, partially mitigated Argentina's softness.

• Adjusted EBITDA ex IFRIC 12 was $145.4 million, with margin contracting to 35.9% from 40.9% in 3Q23.

• Net leverage ratio reached a record low of 0.9x, reflecting robust cash flow generation and debt amortization.

• Recent events include a 124% increase in Argentina's domestic passenger tariffs (effective Nov 1), an $80 million dividend distribution by AA2000, and the acquisition of an additional 2.1% economic interest in AA2000 for $30.9 million.

Financial highlights

• Revenues ex IFRIC 12 declined 4.2% year-over-year to $404.7 million, in line with a 3.9% drop in passenger traffic; revenue per passenger held steady at $19.

• Adjusted EBITDA ex IFRIC 12 was $145.4 million, down 15.9% year-over-year, with margin at 35.9%.

• Total liquidity reached $605 million as of September 30, 2024, up 32% from year-end 2023; all subsidiaries reported positive operating cash flow.

• Net leverage ratio stood at 0.9x, an all-time low.

• Cargo volumes rose 4.4% year-over-year, but cargo revenues declined 12% due to fewer storage days in Argentina.

Outlook and guidance

• Optimism for improved conditions in Argentina as inflation recedes and the recent 124% tariff increase supports revenue growth.

• Continued focus on commercial revenue growth, cost control, and disciplined capital deployment for long-term growth.

• No further domestic tariff adjustments expected in Argentina for 2025.

• Positive international traffic trends expected to persist, especially in Uruguay, Brazil, and Italy.

• Long-term strategy includes accretive acquisitions and strategic developments across airport concessions.